Military Loans with No Credit Checks: The Importance of Keeping Things Real

Nov 20
08:13

2012

Lara Sawyer

Lara Sawyer

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Getting military loans with no credit check seems like a dream deal, especially with the benefits typically available. But it is essential to keep things real and consider the limitations imposed on such offers.

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For some people,Military Loans with No Credit Checks: The Importance of Keeping Things Real Articles there can be a fear that the poor financial practices of their past may come back to haunt them when they apply for a loan. But with some lenders promising no credit checks, that concern, at least, is removed. For military personnel, military loans with no credit check are very common.Of course, there is no such thing as guaranteed loan approval, with all lenders setting criteria that applicants have to meet. But when lenders show no interest in the credit history of their applicants, it does mean that the applicant is as close to a guaranteed thumbs up as they can ever hope to be.The fact is that military loans come with a range of great advantages - many of which civilians might feel quite envious of. But there are still some realities that military personnel need to bear in mind when they apply.No Credit Checks ExplainedThe idea of lenders approving applications with no attention to the credit history of the borrower seems rather foolish. If the borrower has a long history of taking the money and running, then the lender has the right to know. But offering military loans with no credit checks works fine for a number of reasons.Not least is the degree of job security that exists when the employer is the US government. Because the income guaranteed, lenders have little reason to fear the borrower defaulting on the agreement. And with such certainty surrounding the conditions of repayment, lenders practically provide guaranteed loan approval.What is more, because government payments are deposited into the bank account of the borrower, automatic repayments can be made directly from the bank account on payday. This makes defaulting on a military loan impossible.Realities to ConsiderThere are numerous advantages to getting approval on military loans with no credit check, but that is not to say that everything is possible. There are limitations that must be considered, and the reality is that every loan has to be repaid. So, the size of income earned and amount of existing debt faced by the applicant will be taken into account.The loans available are usually limited to between $1,500 and $3,000, depending on the lender and the terms agreed. This is mainly because the no credit check rule is designed to cater to those in need of emergency funds. Larger loan sums are available with special terms, though generally lenders are not willing to offer guaranteed loan approval on these.Also, the interest rate charged on these small loans is relatively high, and with repayments taken directly from an upcoming paycheck, it can cause difficulties with meeting monthly obligations. A large military loan repaid over a longer period will see the repayment sums reduced. So, budget carefully before applying.Influence of the Debt-to-Income RatioAnother factor to consider is the debt-to-income ratio by which lenders assess the affordability of a loan. Even when seeking military loans with no credit checks, there is a chance of rejection if the ratio is not matched. Only 40% of available income should be used to repay loans and debts, so if repayments for the new loan surpass that 40% mark, the application will be turned down.Meanwhile, other basic criteria, like confirmation of age, military rank and income, may put an applicant on the firm road to approval, but there can be no hope of guaranteed loan approval, if these criteria are not met.Still, if the income is high enough, or if the purpose of the military loan is to repay existing debts, the chances of getting the green light is improved.